Luxembourg
11 December 2012
Reporter: Georgina Lavers
Securities Lending default image
Alfi reveals how to service Islamic funds in Luxembourg
The Association of the Luxembourg Fund Industry (ALFI) published a collection of best practices for setting-up and servicing Islamic funds to provide a greater level of understanding of a growing market sector.

Marc Saluzzi, chairman of ALFI, said: “2012 has been a very active year for the Luxembourg Islamic finance community with several new Shariah-compliant funds launched. Luxembourg currently ranks No. 5 worldwide and first in Europe in the number of Shariah-compliant domiciled funds, at 41 funds with €4 billion in assets under management."

The best practices also give a high level indication of whether Islamic finance instruments are compatible with Luxembourg UCITS laws. A number of Shariah-compliant funds have adopted the UCITS structure, given the focus on investor protection of UCITS funds and the fact that UCITS funds have rigorous investment policies that accommodate the principles underlying Islamic finance.

Saluzzi continued: “Setting-up a Shariah-compliant UCITS fund in Luxembourg, opens the doors of the more than 70 countries around the world in which Luxembourg UCITS funds are currently distributed."

“There are also a number of Shariah-compliant private equity and real estate structures established in Luxembourg and the European distribution passport created by the AIFM Directive will offer new opportunities for these products.”

In January 2010, the Luxembourg direct tax authority published a circular on Islamic finance, clarifying the tax treatment of murabaha contracts and sukuk transactions. This was followed, in June 2010, by a circular from the indirect tax authority clarifying the treatment of murabaha and ijara contracts.

More news
The latest news from Asset Servicing Times
Join Our Newsletter

Sign up today and never
miss the latest news or an issue again

Subscribe now
Saudi stock exchange makes move to T+2
24 April 2017 | Riyadh | Reporter: Stephanie Palmer
Tadawul, the Saudi Arabian stock exchange, has officially moved to a T+2 settlement cycle for listed securities, from its previous T+0 system
AxiomSL wins commodity transaction and trading reporting mandate
24 April 2017 | London | Reporter: Stephanie Palmer
Commodity trading firm Trafigura PTE has selected the AxiomSL platform for its global trade and transaction reporting
DTCC pushes ahead with best-interest standards despite regulatory delay
21 April 2017 | New York | Reporter: Stephanie Palmer
DTCC's WMS business will go ahead with new capabilities to meet the US DOL's mandatory best-interest standards for retirement savings, despite the department delaying implementation of the standards
Record-breaking Q1 for BNY Mellon
21 April 2017 | New York | Reporter: Stephanie Palmer
BNY Mellon saw record breaking levels of assets under custody and/or administration in Q1 2017, reaching a total of $30.6 trillion
BlackRock sees uptick in AUM
20 April 2017 | New York | Reporter: Stephanie Palmer
BlackRock’s total assets under management (AUM) have seen a 14 percent increase to reach $5.2 trillion, its Q1 2017 results have revealed
$33bn REIT mandate for BNY Mellon
20 April 2017 | New York | Reporter: Stephanie Palmer
BNY Mellon Alternative Investment Services has been selected to provide fund administration for PGIM Real Estate’s US real estate funds
Apex in Saudi fund admin partnership
20 April 2017 | Riyadh | Reporter: Stephanie Palmer
Apex Fund Services has partnered up with Saudi Arabian custodian Albilad Capital, to deliver fund administration solutions to Saudi funds
More news